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Comcast Beats on Q3 Earnings, Lags Rev

Comcast Corp. (CMCSA - Free Report) reported mixed financial results for the third quarter of 2013. The company’s triple-play voice, video and data bundled offerings are still gaining market traction. However, the company continues to lose video subscribers. Comcast currently has a Zacks Rank #3 (Hold).

Third-Quarter Results in Detail

GAAP net income for the third quarter of 2013 was $1,732 million or 65 cents per share compared with $2,113 million or 78 cents per share in the prior-year quarter. Quarterly earnings per share of 65 cents significantly outpaced the Zacks Consensus Estimate of 60 cents. Total revenue came in at $16,151 million, down 2.4% year over year and also below the Zacks Consensus Estimate of $16,219 million.

Quarterly operating costs and expenses were $10,821 million, down 6.2% year over year. However, quarterly operating income was $3,414 million, representing annualized growth of 12%. Operating margin was 21.1% compared with 18.4% in the prior-year quarter. During the third quarter, Comcast repurchased 12 million worth of its common shares for $500 million and paid dividends totaling $512 million.

In the third quarter of 2013, Comcast generated $5,330 million of cash from operations compared with $5,008 million in the year-ago quarter. Consolidated free cash flow was $1,968 million as against $1,514 million in the prior-year quarter.

Cash and marketable securities, at the end of the third quarter of 2013, were $5,735 million compared with $12,415 million at the end of 2012. Total debt at the end of the reported quarter, was $46,525 million as against $40,458 million at the end of 2012. The debt-to-capitalization ratio was 0.47 compared with 0.43 at the end of 2012.

Cable Communications Segment

Quarterly total revenue was $10,491 million, up 5.2% year over year. Operating cash flow was $4,246 million, up 6.2% year over year. Within this segment, Video revenues were $5,127 million, up 2.9% from the prior-year quarter. High-Speed Internet revenues were $2,592 million, up 7.9% year over year. Voice revenues were $919 million, up 2.6% year over year. Advertising revenues were $541 million, down 10.8% from the year-ago quarter. Business Services revenues were $836 million, up 26.4% year over year. Other revenues were $476 million, up 11.6% year over year.

On Sep 30, 2013, Comcast had 20.283 million (up 6.6% year over year) High-Speed Internet customers; 10.496 million (up 7.2% year over year) Voice customers; and 21.647 million (down 1.6% year over year) Video customers.

In the reported quarter, Comcast lost a net 129,000 video customers compared with a net loss of 117,000 video customers in the prior-year quarter. The company added a net of 297,000 High-Speed Internet customers compared with 287,000 in the year-ago quarter. Similarly, Comcast added a net 169,000 voice customers as against 123,000 in the prior-year quarter.

NBC Universal Segment

Quarterly total revenue was $5,851 million, down 14.2% year over year. Operating cash flow was $1,250 million, signifying a 9.6% year-over-year increase. Within this segment, Cable Networks revenues were $2,239 million, up 4% year over year. Broadcast TV revenues were $1,644 million, down 41.1% year over year. Filmed Entertainment revenues were $1,400 million, up 3.3% year over year. Theme Parks revenues were $661 million, up 7.9% year over year.

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